Budget 2014: How Govt Can Use ICT For Inclusive Growth

by CXOtoday News Desk    Jul 07, 2014

ICT and growth

The Union Budget 2014-15 presents an opportunity for the Modi government to outline its strategy to achieve the much-awaited development agenda. It will not just help set the tone for a futuristic policy framework, but will also enable the government to formally start addressing some of the critical issues facing the economy. The IT industry strongly believes that technology can play a critical role in achieving inclusive development in the country.

“I am keen to see if there will be any policy guidance about use of information technology for inclusive growth especially in the areas of better citizen services delivery and governance,” said Microsoft Chairman Bhaskar Pramanik in a recently released statement.

Apart from policy direction to improve the tax regime, the industry also wants the government to focus on encouraging local manufacturing. “I am expecting some specific policy announcements in the Budget to improve local manufacturing eg. cheaper power, scalable infrastructure, one stop regulatory clearances and long term tax incentives. And free market competitive framework for local manufacturers. I strongly believe protectionist measures like preferred market access do not encourage manufacturing,” said Pramanik.

IT industry body Nasscom has already laid down a five-pronged policy agenda that the government can follow. Apart from encouraging innovation and entrepreneurship, the government must leverage ICT and innovation to improve governance and achieve national development goals, it says.

“The IT industry can leverage its global experience to help map and re-engineer administrative processes to bring in efficiency, transparency and accountability in key areas impacting citizens and businesses directly. Outreach and access to education can be multiplied manifold by extensive use of IT, including improving quality of curriculum and schooling experience,” suggests Nasscom. “Current procurement procedures in the Government are the biggest roadblock in rapid roll out of such initiatives.”

“To be globally competitive, it is essential that entrepreneurship and innovation are encouraged,” believes Uday Challu, CEO, iYogi adding that early stage domestic financing is practically non-existent in India. “This problem can be solved by introducing tax incentives for investments in start ups, and allowing new methods of fund raising such as crowd sourcing, are only some examples of changes that should be made.”

“In recent years, the Minimum Alternative Tax (MAT) has increased considerably – from 7.5% to 18.5%. This has specifically impacted companies that operate within SEZ’s, and it’s important that it be brought down to a reasonable 10%,” Challu said.

According to a McKinsey Global Institute report, “ICT adoption should be a key strategy to enhance growth, increase global competitiveness of the corporate/unorganised sector and improve quality of governance. Deployment of e-Initiatives for a system-based, policy-driven governance, healthcare and education can potentially increase GDP by 2%.”

Read More:

What IT Expects From Union Budget 2014-15